Capital gains in a roth account taxable?

Forum|Forum|4 years ago
August 18, 2021
1 reply
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selling stock in a roth account

TurboTax Online

macuser_22

Alumni - Champ

Gains and losses within an IRA are not reportable. Only distributions from the IRA are reportable. Removing your own contributions are always tax free - gains removed are taxed as ordinary income if removed before age 59 1/2 - after 59 1/2 there is generally no tax.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

TomzeeAuthor

Level 2

Many thanks for your rapid reply Macuser🙂

Since what you say is true I just find it hard to believe that

the government would allow capital gains to go untaxed!

That is really awesome I simply hope that they continue to

do so.

Thanks Again

macuser_22

Alumni - Champ

That is the whole point for IRA's - they grow tax free until you withdraw the funds. For Roth, after age 59 1/2 then there is never any tax but the money you contribute to the Roth was already taxes with earned. Traditional IRA's distributions are taxed at any age but you can deduct your contributions in the year made so you have more money to invest. And after age 72 you MUST take yearly distributions (RMD's) - Roth's do not have RMD's.

Which is better - Roth or Traditional? It's a trade off, but for young people a Roth usually wins out in the long term.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**